The biggest threat to Tesla in the near term is less direct competition but government lobbying to "level the playing field" for legacy auto makers.
Agreed 100% - and I’ll throw in a dig at legacy auto supporters, Tesla bears and those poor at Econ.
The thesis is legacy auto will make the transition to EV easier because they have their own “profits” to spend on R&D.
Profits are only profits if you book them. When you reinvest them, they become expenses. And the IRR and ROI isn’t going to be pretty.
Legacy auto only benefit is they won’t go bankrupt because at least it’s self financed. Well in theory anyway until they run into a few cliffs:
1.) The more EV they sell the more money they lose. Their EV sales cannibalizes their ICE sales.
2.) What shareholder wants to keep their money in teams that are in rebuilding mode?
3.) LG, Samsung etc need their profits...
4.) If Tesla self financed, raises equity through debt financing, dilutions - as long as they can do it they are in the fight. What EV do you want to bet against?
5.) The Supercharger and vehicle data moat is untouchable.
TLDR - betting against Tesla for the long term will make you poor.